For the multiple regression model Y=40,000+15000X 1 + 200X 2 , where Y is future
ID: 3183657 • Letter: F
Question
For the multiple regression model Y=40,000+15000X1 + 200X2, where Y is future income, X1 is a dummy variable representing whether or not either or both parents attended college (if yes, it takes the value of 1, and 0 if not), and X2 represents years of secondary schooling of the individual.
What is the expected income of an individual whose mother, but not father, attended college, and who themselves have 5 years of secondary schooling?
50,000
70,000
65,000
Cannot be determined.
50,000
70,000
65,000
Cannot be determined.
Explanation / Answer
The correct answer is C . 65000
Calculations:
X2 = 5 from the data
X1 = 1 since the mother attended college
Hence, the answer is 40000+ 15000*1 + 2000*5 = 65000